Sensex falls as global stocks shake

Today's major news

Bharti Airtel Q1 results disappoint Street; the stock closes 1.42% lower

Bosch Q2 net profit up 11% yoy; the stock ends 0.71% down

Subex gains on strategic sale; the stock closes 4.13% higher



Global signals

European shares extending its previous session’s losses fell on Wednesday, with heavyweight banks and miners declining, as the sentiment soured after the Federal Reserve's more pessimistic assessement of the US economy.

All the major Asian indices shut in the negative territory except Shanghai Composite that closed with gains.

The US stock index futures pointed a lower opening at the Wall Street on Wednesday, as the Federal Reserve's gloomier assessment of the economy rattled investors’ sentiment. The investor may keep an eye on June international trade, while the companies scheduled to report quarterly results include Macy's Inc and Cisco Systems.

Indian indices:

It was a second day in a row that the bears took a firm control on the domestic markets. The concerns on global economic recovery and weakness across the world led the Indian bourses to close the session with heavy losses. Global sell-off put pressure on the domestic market, with big cuts in financials, metals and capital goods stocks that dragged the Nifty below the important 5450 mark.

Software exporters dropped after the Federal Reserve said that the US economic growth will be more modest than anticipated. ICICI Bank, Housing Development Finance Corporation (HDFC) and ITC led declines in the Sensex. Reliance Industries was again the drag on markets for the third consecutive day. One of the largest telecom operator, Bharti Airtel retreated as its profits declined in Q1FY2011. On the other hand, Tata Motors, the owner of Jaguar Land Rover, jumped to an all-time high after returning to profit in the first quarter. Financial services firms surged after the Reserve Bank of India said it intends to grant limited number of new bank licences.

The Sensex started the day 43 points lower at 18177. The index briefly turned positive and touched the day’s high of 18264 in the morning trades. However, from that level it started to slip on account of weak global markets. In the afternoon session, the Sensex broadened its losses as the European stocks opened lower. In the late trade, the index slumped further and touched the day’s low of 18042 as the European markets saw further weakness and US futures traded lower.

At the closing bell, the Sensex shut shop at 18070, 150 points down. The Nifty closed at 5421, 40 points lower.

Bond Market Wrap Up: India’s 10-year bonds gained on speculation that the central bank will temper the pace of rate increases after the Federal Reserve pledged to keep borrowing costs low for an extended period.

Market Outlook: In the US, the economic data on tap includes June international trade, while the companies scheduled to report quarterly results are Macy's Inc and Cisco Systems.

Market sentiment

The market breadth was negative as declining stocks outdid the advancing ones. Of the 3,059 shares traded on the BSE, 1,753 shares declined whereas 1,202 shares gained. Hundred and four shares traded unchanged.

Sectoral & stock screening

All the 13 sectoral indices closed in the red except BSE Auto that ended with marginal gains of 0.01%. Among losers, BSE Realty was the worst performer, down by 1.81%, followed by BSE Bankex that shed 0.95% and BSE health care (HC) that declined by 0.93%.

Among 'A' group stocks, Tata Communications gained the most, up by 10.88% after its American depository receipt (ADR) surged over 7% in Nasdaq, followed by Tata Motors that rose by 5.16% after posting robust Q1FY2011 results and Petronet LNG that advanced by 5.08%. On the flip side, Educomp Solutions and IVRCL Infrastructures were down by 9.77% and 7.48% respectively on poor Q1FY2011 earnings, followed by MMTC that fell by 4.79%.

Viewing volumes

Industrial finance company - IFCI was the most traded share with over 1.50 crore shares changing hands on the BSE, followed by India's second largest developer - Unitech (0.55 crore shares), India’s one of largest car maker - Tata Motors (0.37 crore shares), Tata Group telecom firm - Tata Teleservices (Maharashtra) (0.35 crore shares) and steel major- Tata Steel (0.26 crore shares).